is executive director of the Economic Research Center and vice president of policy at The Buckeye Institute.

And if Ohio lawmakers will boldly reform an outmoded tax code that discourages hard work and punishes investment, economic growth and prosperity for Ohio will follow. As those low- or no-income tax states become more attractive to businesses and their employees, Ohio becomes less so.īut fortune still favors the bold. Twenty states already either have a flat tax or no income tax at all, and at least three more states- Iowa, Georgia, and Mississippi-appear poised to join them. Many reasons factor into where businesses and families choose to locate and live, and income taxes are undeniably one of them. States compete to attract new workers and businesses. And with Ohio’s rainy day fund flush with record cash, now is the perfect time to replace a broken tax code with one that works.įinally, moving to a low, flat tax rate will make Ohio more economically competitive. These are significant taxpayer savings that will let wage earners, not politicians, decide how and when to spend the money they earn. And eliminating wasteful spending and tax giveaways to special interests will save taxpayers $2.7 billion over the biennial budget cycle.Ī billion here, a billion there, and soon we’ll be talking about real money. A flat tax will save Ohio $1.7 billion in fiscal year 2024. Third, a low, flat income tax rate will save Ohioans money, allowing more workers to keep more of their own earnings. Some of the fastest growing states like Texas, Florida, and Tennessee have already eliminated their income taxes entirely and made themselves more attractive to entrepreneurs, workers, and retirees living off invested dollars that have already been taxed. We estimate that moving to a flat tax will create thousands of new jobs and increase Ohio’s GDP by $5 billion by the next budget cycle.Īs many states have rightly recognized, investment drives economic growth.

Economic research shows that income taxes reduce investment returns, trailing only corporate taxes as the second most harmful form of taxation.

What is flat tax